Plans for a six-acre gypsy and traveller site off the A16 near Cowbit have stalled over a condition to provide a new road.
South Holland District Council want to build a 30-caravan site on land off Drain Bank North, near Cowbit, to replace an illegal camp in Broad Drove, Gosberton Clough.
The plans were controversially approved by the council last May, despite a 500-strong petition and more than 50 letters of objection from the public.
But progress on the site has been held by a condition proposed by Lincolnshire County Council’s highways department that would see a section of Drain Bank North rebuilt, rather than repaired.
Coun Christine Lawton, district council portfolio holder for housing, said: “We are keen to move forward with this development as quickly as possible, but we have to reach a consensus on the issue of infrastructure.
“The idea of a new road is totally out of proportion to what is being proposed and I hope some sense will prevail.”